Whitman, Brown want to make CA business friendly

The race for governor is still very close just two weeks before Election Day. Meg Whitman and Jerry Brown are just a point or so apart -- a statistical tie.

Whitman and Brown agree on making California business friendly. Both have set the economy and state spending as top priorities.

"We have to compete for every job, that means we have to have competitive tax rates, it means our regulatory environment has to be competitive and smart," Whitman said.

"As mayor I cut the red tape, I dismantled stupid regulations or found a way around them in Oakland," Brown said.

As the mayor of Oakland, Brown encouraged growth, saying if you want more of something do not tax it.

"I would not increase any taxes," he said.

Whitman advocates targeted tax cuts, including eliminating the state's capital gains tax, which she calls a tax on innovation.

"If I have to pay taxes on my stock portfolio how is that a tax on innovation? Most investments in California go into new businesses, they go into things that are unproven, it's risky," she said.

What about investors who are not investing in risky new business? Who are investing in blue chip companies?

"I think you can see over the last 10 years investments haven't necessarily, well let's look at the last 50 years, they've made out OK, listen we need to be competitive, the true facts are other states don't have this particular tax," Whitman said.

Brown calls it a gift to the rich.

"We looked at the zip code in the very place she lives, that group earned more capital gains than any other group in California," he said.

In the past decade the tax generated anywhere from $3.2 to $11.7 billion for the state; 87 percent of it paid by people making more than $200,000 a year.

"So she in effect wants to make the problem worse before she begins to solve it," Brown said.

"What Jerry Brown forgets is that we compete with other states, Arizona, Colorado, Utah, Texas, which have lower rates or nor state capital gains tax at all," Whitman said.

The other big area of disagreement on jobs is the state's green house gas laws known as AB32.

"Today in California only 1 percent of jobs are green jobs, 99 percent of jobs are in the rest of the economy," Whitman said.

Whitman would suspend AB32 for a year until the economy improves.

"We need to own green jobs, we can own green jobs, but let's make sure we don't hurt the rest of the economy," she said.

"Ms. Whitman is saying she's going to suspend the underlying law for a year," Brown said. "Well what about the year after and the year after?"

Brown says green jobs are the future and Whitman's delay would create uncertainty.

"And that's the worst thing, when business people have to commit funds and take risks we want certainty," he said.

ABC7 asked them both how they would hold down state spending. Brown began by saying what he will not cut.

"We're not going to cut education, we're not going to cut road building, we're not going to cut out high speed rail," Brown said.

When pressed, he said he would cut government workers.

"Well I'd start with the big shots, I'd start with the governor's office, I'd start with PR, I'd start with some of the lawyers," Brown said.

Cutting the government workforce is part of Whitman's plan as well, by instituting a hiring freeze until the work force is cut by 33,000.

"So we're going to hold people accountable for delivering results based on the number of people they had five years ago," Whitman said.

But neither candidate's plan would come close to making up the projected $19 billion deficit. So where else would they cut?

Brown says he would put the tough question to voters.

"I will lead that process that I think is the only path forward," he said.

Whitman says she will ferret out billions of dollars in fraud and waste and get legislators to focus on fraud and waste by vetoing every bill that does not deal with spending, jobs or education.

"I'm going to veto everything else that isn't a public safety emergency or a few other exceptions," she said.

Brown says he will persuade.

"Don't just talk to the leaders, but all 120 legislators and spend days and days before Christmas, after Christmas, until we get consensus," he said.